Drug firm may get $1 million in fines

October 18, 1990|By Kelly Gilbert | Kelly Gilbert,Evening Sun Staff

American Therapeutics Inc., of Bohemia, N.Y., could be fined $1 million today as a federal judge in Baltimore sentences the generic drug maker on federal racketeering, drug adulteration and obstruction-of-justice charges.

Defense attorney Ty Cobb said late yesterday that ATI has agreed to pay up to $1 million in fines to settle two criminal cases in U.S. District Court here.

ATI pleaded guilty to the racketeering charge in one case last spring, shortly after federal prosecutors filed criminal charges against the company, its former president, a consultant and a former FDA official. Those charges stemmed from a bribery scheme involving the FDA's generic drug approval process.

In the second case, filed only two weeks ago, prosecutors charged ATI with drug adulteration and obstruction of justice. The government also charged the company with making false statements to the FDA about the manufacturing processes it used to make several generic drugs, for which ATI sought government approval for sales of the drugs to the public.

Cobb said ATI will plead guilty to these latter charges today and expects to be sentenced in both cases at the same court hearing.

First Assistant U.S. Attorney Gary P. Jordan said he will ask Judge John R. Hargrove to impose a fine of $500,000 in each case.

Documents in the latest ATI case surfaced in court files yesterday after federal prosecutors filed an obstruction of justice charge against Gena R. Finelli, the former director of research and development at Bolar Pharmaceutical Co. in Copiague, N.Y.

In the Bolar case, Jordan and U.S. Attorney Breckinridge L. Willcox alleged in court documents that Finelli told company research chemists to lie to FDA investigators during a routine compliance inspection at the Copiague plant Sept. 21, 1989.

Finelli told the chemists to deny that they kept notebooks containing recorded research activity and test results on generic drugs the company intended to market after obtaining FDA approval, the prosecutors alleged.

Willcox said another Bolar official ordered Finelli to instruct the chemists to lie to the FDA investigators. That official was not named in the court papers.

Finelli, who has agreed to cooperate with prosecutors in a continuing investigation, is expected to plead guilty next week. On conviction, she faces maximum penalties of five years in federal prison without parole and a $250,000 fine.

Bolar, one of the nation's top-ranking generic drug firms, has been a target of investigations by the Justice Department, FDA, Department of Health and Human Services and Congress for more than a year.

The Finelli case and the newest ATI case kicked off the second phase of a broad-based investigation of the generic drug industry. This phase focuses on fraudulent documentation of manufacturing records, product substitutions for FDA drug tests and alleged obstruction of federal inspections.